Effectively advise beneficiaries of their withdrawal rights to prevent maximum amounts of trust contributions from being subject to gift tax
Estate planning practitioners regularly include some form of withdrawal rights in irrevocable trusts, exercisable with respect to a specific amount and for a limited period of time, to enable the trust's donor to use his Internal Revenue Code Section 2503(b) annual exclusion from gift tax for contributions to the trust. A withdrawal right must be included to provide the beneficiary with a “present interest” in the gift. By providing the withdrawal rights, all practitioners want to ensure ...
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